Is it cheaper to remortgage or use car finance?

Monthly payments are usually lower with a remortgage, but total cost is often higher due to the much longer repayment period. We'll calculate both scenarios for your specific situation.

Can my lender refuse a remortgage for a car?

Lenders don't usually ask what the additional borrowing is for, but they do assess affordability. If you can afford the increased payments, most lenders will approve the additional borrowing.

Does remortgaging for a car put my home at risk?

Yes — any mortgage borrowing is secured against your property. If you can't make payments, your home could be at risk. This is an important consideration versus unsecured car finance.

Can I overpay to reduce the extra cost?

Yes, and this is advisable. If you remortgage for a car and overpay the additional amount within 3-5 years, the total cost becomes much more comparable to car finance.

Remortgaging to Buy a Car

Remortgaging to buy a car can offer lower monthly payments — but you'll pay more interest long-term. We help you weigh up whether it's the right choice.

Should You Remortgage to Buy a Car?

Remortgaging to raise capital for a car purchase is possible, but it's important to understand the implications. While the interest rate on your mortgage is likely lower than car finance rates, you'll be spreading the car cost over a much longer period — potentially paying far more in total interest. We'll analyse your specific numbers and advise on the most cost-effective approach.

Honest analysis — we tell you if it's not worth it
Lower monthly payments compared to car finance
Total cost comparison: remortgage vs PCP vs HP vs loan
Capital raising without separate loan applications
100% fee-free, impartial advice

Step 2 of 4

Tell us about the property

Estimates are fine — we'll refine the numbers together.

Property Value (£) *

Deposit Amount (£)

Annual Household Income (£)

Your home may be repossessed if you do not keep up repayments on your mortgage.

How It Works

You remortgage for more than your current balance, releasing the difference as cash to buy the car. For example, if your current mortgage is £150,000 and your property is worth £250,000, you could potentially remortgage to £170,000, releasing £20,000 for a car purchase.

The True Cost

While mortgage rates are lower than car finance rates, you're spreading the cost over 20-30 years rather than 3-5 years. A £20,000 car financed over 25 years at 4% would cost over £11,000 in interest alone. The same amount on PCP at 7% over 4 years would cost around £3,000 in interest. Lower monthly payments don't always mean a better deal.

When It Makes Sense

Remortgaging for a car can make sense if you're already remortgaging and want to simplify your finances, your car finance rate would be very high (bad credit), you want to reduce monthly outgoings in the short term, or you plan to overpay the mortgage to offset the additional borrowing.

Alternatives to Consider

Before remortgaging, consider personal loans (fixed term, no property risk), PCP or HP (matched to the car's useful life), 0% credit cards (for smaller amounts), or saving for a cash purchase. We'll compare all options to find the most cost-effective solution.